Apple v. Samsung: Jury delivers mixed verdict in patent feud

By Howard Mintz hmintz@mercurynews.com

Posted:
05/02/2014 05:27:46 PM PDT

Updated:
05/03/2014 06:35:02 AM PDT

SAN JOSE -- Samsung on Friday was hit with $120 million in damages for copying technology in Apple's iPhone, but a federal jury took some of the legal sting out of the verdict -- giving Apple a fraction of the damages it sought, rejecting many of its copying claims and finding the Silicon Valley powerhouse violated one of the South Korean tech giant's patents.

The eight-member jury determined that Samsung violated two Apple patents, including its popular slide-to-unlock feature on iPhones. But the damages award, while giving Apple further ammunition in its legal and public relations war with its archrival, was a far cry from the $2.2 billion the Cupertino company urged the jury to award. It also was far less than the first trial between the two companies in 2012, when Apple prevailed on most of its copying claims and Samsung was slapped with nearly $1 billion in damages.

Meanwhile, the jury found that Apple violated one of Samsung's patents, ordering the iPhone maker to pay $158,000 in damages.

The jury's verdict is the latest chapter in the global conflict between Apple and Samsung, the top powers in the smartphone and tablet markets, who remain locked in a continuing legal and sales battle over technology that has reshaped daily life. And this verdict is by no means the end; the outcome is almost certain to go to a federal appeals court, which already is reviewing the first round in the rivals' struggle for legal supremacy in smartphone technology.

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In assessing evidence from a monthlong trial that ended earlier this week, the jury found nine Samsung smartphones had in some way infringed two iPhone technology patents but cleared Samsung's Galaxy 2 tablet of copying iPad technology and rejected two smartphone patent claims. A federal judge found before trial that Samsung violated another Apple patent, the auto-word correct, so the jury decided only damages on that question.

Samsung's Galaxy S3, the most recent smartphone involved in this trial, accounted for the largest chunk of the damages award, about $52 million of the total.

The jury, which reached its verdict on the fourth day of deliberations, is not entirely finished. The jurors must return to federal court Monday to re-evaluate one damages issue, but it is not expected to significantly affect the overall verdict.

For Samsung, the jury's verdict was far less of a blow than the result two years ago and may have been attributable to the very different character of the second trial. In this trial, Google was a central part of the case, as Samsung argued the search giant was the actual target of Apple's patent complaint because of its Android operating system, which ran the Samsung devices at issue in the trial.

During the current trial, Samsung argued that if Apple won, it should only be entitled to about $38 million in damages. That figure turned out to be much closer to the final award than Apple's damages demand.

Samsung lead attorney John Quinn declined to comment after the verdict. But he told jurors during closing arguments this week that there would be "dancing in the streets of Cupertino," if Apple was awarded even $100 million. There may not have been dancing, but Apple claimed victory in the trial.

"Today's ruling reinforces what courts around the world have already found: that Samsung willfully stole our ideas and copied our products," Apple said in a statement.

The jury, in siding with Samsung on one of its two counterclaims against Apple, found Apple violated its patent rights to camera folder technology in smartphones, a patent Samsung had bought from Hitachi. That accounted for the damages award against Apple.

U.S. District Judge Lucy Koh is expected to be asked to order a new trial or to set aside at least parts of the jury's findings. The outcome also may rekindle efforts to settle, although Apple and Samsung top executives for years have been unable to resolve their differences.

In addition, Apple is likely to seek a sales ban on the Samsung products found to have infringed its patents, although that failed after the first trial. Apple instigated the feud, for the past four years depicting Samsung as an unrepentant copier of iPhone and iPad technology that should be ordered to pay a steep price for climbing up the market ladder on the back of the Cupertino company's innovations. To Apple, the case has been about protecting those innovations.

But Samsung has struck back hard, portraying Apple as a bully trying to stifle competition. The maker of the increasingly popular line of Galaxy smartphones and tablets has denied copying, arguing that consumers are buying their products because they are cheaper and offer better features such as screen size, not because of any duplication of iPhone gadgetry.

Both sides have spent tens of millions of dollars on lawyers, consultants and others to persuade judges, juries and to an extent the public that they are in the right.

Samsung has appealed the first jury's verdict to the U.S. Federal Circuit Court of Appeals in Washington, D.C., the court that reviews all patent cases. Apple, meanwhile, has appealed Koh's refusal to issue the injunction, a key to its legal strategy, which is to restrict the sales of Samsung products it considers the fruit of iPhone technology.

The second trial was a very different affair than the first, particularly because of the role Google played. In the first trial, Apple's case centered on allegations Samsung copied the very "look and feel" of the iPhone and iPad, while the patents at issue in the second trial involved software features such as the slide-to-unlock and auto-word correct.

Samsung argued that Apple was in fact targeting software features for the most part developed by Google for its Android operating system, which ran the 10 Samsung products in the trial. Samsung's lawyers told the jury that Apple's case was about its "holy war" against Google, quoting a comment from an internal email from late CEO Steve Jobs, and not truly aimed at Samsung.

But Apple accused Samsung of trying to hide behind Google, telling the jury that Samsung, not Google, decides what technology to include and sell in its smartphones and tablets. Apple also introduced evidence that Google has agreed to cover at least part of Samsung's legal costs if it loses the patent case.

Meanwhile, Apple's legal assault continues to lag behind the release of newer Samsung products. As the second trial unfolded against smartphones such as the Galaxy S3, Samsung was releasing its latest smartphone, the Galaxy S5.

Legal experts have said that patent litigation such as Apple's simply cannot keep pace with competitors unveiling newer product lines. Samsung, a report released in late April shows, now holds the largest share of the worldwide smartphone market, although its share slipped in the first quarter of this year for the first time since 2009.

Howard Mintz covers legal affairs. Contact him at 408-286-0236 or follow him at Twitter.com/hmintz.